Small Business BC

How to Prove the Value of Your Company

If you’re planning to exit your business, you can use market research to understand the value your company might bring when you put it up for sale.

There are two good reasons to do your homework:

  1. Researching the market price for businesses similar to yours will give you an indication of how much your business is worth. 
  2. The market research you conducted while operating your business will prove the value of your business to potential buyers.

Determine the Best Selling Price

You can visit a website like Business-Trader.com to find out what businesses like yours are selling for. The main drawback of this kind of site is that many business owners avoid them for fear a public listing will have a negative impact on their sales. As a result, the prices you see on these kinds of sites might not be indicative of the true value of your business.

The best approach is to use a broker. Brokers have a network of contacts who can discretely spread the word that your business is for sale without affecting its reputation or sales. Consult your local Yellow Pages for listings.

Prove Your Business’s Worth

When it comes time to sell your business, your past market research is an important tool for informing prospective buyers of the potential of your business. Your research should include:

  • Anticipated growth of your target market(s)
  • Changes with your competition
  • Industry or market trends

About The Author

Small Business BC

This article was authored by a member of the Small Business BC team. When you find yourself asking "How do I...?" Give us a call. We'd be happy to help.

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